Post on 07-Feb-2023
EURCNYEGPJODLBPLKRMURXAFXOFCNYEUREGPJODLBPLKRMURXAF
AFA, AFN, XAG, MGA, THB, PAB, ETB, VEB, VEF, BOB, GHC, CRC, SVC, NIC, NIO, DKK, EEK, ISK, TND, YUD, YUM, AED, MAD, STD, AUD, BSD, BZD, BMD, BND, KYD, CAD, XCD, FJD, GYD,
HKD, SBD, JMD, BBD, LRD, NAD, NZD, SGD, SRD, TWD, TTD, USD, USS, USN, ZWD, ZWR,
ZWL, VND, GRD, AMD, XDR, CVE, MZE, PTE, TPE, EUR, CHE, ANG, AWG, NLG, HUF, ADF, BEF, BIF, KMF, CDF, DJF, FRF, GNF, LUF, MGF, RWF, CHF, XOF, XAF, XPF, XFO, XFU, CHW,
HTG, PYG, UAH, PGK, LAK, HRK, MWK, ZMK, AOA, AOK, AON, AOR, MMK, GEL, LVL, ALL, HNL, SLL, MDL, ROL, RON, BGL, BGN, SZL, MTL, ITL, SML, VAL, LTL, CYP, EGP, FKP, GIP, IEP, LBP, SHP, SDP, SDG, SYP, TRL, TRY, GBP, LSL, AZM, AZN, TMM, TMT, DEM, BAM, FIM, MZM, MZN, BOV, ERN, NGN, BTN, XAU, MRO, TOP, XPD, MOP
NOK, SKK, SEK, CZK, CSK, GMD, MKD, DZD, BHD, IQD, JOD, KWD, LYD, RSD, CSD, SDD,
Teckwah Industrial Corporation Ltd,
Singapore
Economic benefits of standards
Country : SingaporeProject team : Project leader : Mr. Ong Liong Chuan, Deputy Director, Business Continuity Management, SP PowerGrid Ltd ; Chairman of Technical Committee on Business Continuity ManagementDeputy project leader : Mr. Norman Lee, Group Quality System and Assets Protection Manager, Teckwah Industrial Corporation LtdMember : Mr. Jason Low, Senior Manager, SPRING SingaporeMember : Mr. Harish Menon, Undergraduate Student, National University of SingaporeISO Central Secretariat advisor : Reinhard Weissinger, Manager, Research, Education and StrategyDuration of the study : May 2012 – February 2013
International Organization for StandardizationISO Central Secretariat1, chemin de la Voie-CreuseCase postale 56CH - 1211 Genève 20Switzerlandwww.iso.org
ISBN 978-92-67-10619-9
© ISO, 2013All rights reserved
1Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
Table of contents
1 Objective and organization of the case study .................................................................................31.1 Objective .....................................................................................................................................................................................................31.2 ISO case study project timeline ...........................................................................................................................................31.3 Methodology ..........................................................................................................................................................................................4
2 Introduction to the selected standard ..................................................................................................5
3 Introduction to the selected company ..................................................................................................6
4 Attitude of the company towards standardization ....................................................................7
5 Analysis of the value chain ..........................................................................................................................105.1 Company value chain ...............................................................................................................................................................105.2 Key value drivers ............................................................................................................................................................................14
6 Scope of the ISO case study .........................................................................................................................15
7 Identifying impacts of standards .......................................................................................................... 17
8 Selection of operational Indicators to measure the impacts of standards ............................................................................................................................................................. 17
9 Calculation of the economic benefits of standards ................................................................199.1 Methodology for calculating operational indicators .............................................................................. 209.2 Impacts on specific business functions ................................................................................................................ 23
10 Qualitative and semi-quantitative considerations .................................................................23
11 Evaluation of the results ...............................................................................................................................24
12 Conclusion .................................................................................................................................................................26
2 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
Implementation ofSS 540:2008Singapore Standard on Business Continuity Management
by Teckwah Industrial Corporation Ltd., Singapore
3Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
1 Objective and organization of the ISO case project
1.1 Objective
The main objective of the ISO case study was to determine and quantify
the economic benefits that can be gained by a company implement-
ing external standards in its business. This enables stakeholders in
both private and public sectors to better appreciate the economic
and social impact of voluntary consensus standards and to raise the
awareness of policy makers and business leaders of the importance of
standardization. While many companies realise the importance of the
use of standards, few have analysed their impact on the company’s
bottom line and their key role in a company’s strategy.
1.2 ISO case study project timeline
This ISO case study in Singapore was initiated in May 2012 and the
report finalised in February 2013. The project was conducted by
SPRING 1) Singapore with guidance from the ISO Central Secretariat
Advisor and the support of an intern from the National University of
Singapore. Teckwah Industrial Corporation Ltd (Teckwah), the first
company in the printing and packaging industries to have achieved
3rd party certification to SS 540:2008 (SS 540) the Singapore Standard
for Business Continuity Management, participated in the project.
1) SPRING Singapore is the enterprise development agency responsible for helping Singapore
enterprises grow. We collaborate with partners to help enterprises in financing, capability and
management development, technology and innovation, and new market access. As the national
standards and accreditation body, SPRING develops and promotes an internationally-recognised
standards and quality assurance infrastructure that builds trust in Singapore enterprises, products
and services, thereby enabling their global competitiveness and facilitating global trade.
4 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
1.3 Methodology
The ISO methodology aims at assessing and quantifying the impacts
of standards from the perspective of the selected company. The
methodology is organised around the following four key steps :
Step 1 : Understand the value chain 2)
Desk research was undertaken on the print and packaging industry
with a view to determining the value chain for the industry and
subsequently for the selected company.
Step 2 : Identify impacts of standards
The relevant standards are described and their impact on all activities
of the business functions is identified and mapped to the company
value chain following a series of interviews with the organisation’s
senior management.
Step 3 : Analyse value drivers and define operational indicators
Value drivers are organizational capabilities crucial for the success
of each business function forming the value chain. This assessment
identifies the value drivers specific to the value chain of Teckwah, the
company selected for this case study. The impacts of the standards
on the value chain are measured and quantified using operational
indicators which are then translated into financial impacts.
The impacts of standards are quantified on an annual basis ; however,
the projected impact spans over a 5-year period from the introduc-
tion of a standard after which the improved operations become an
integral part of the company’s normal operating procedures.
2) A value chain is a chain of activities. Products (or services) move through all the activities in a
prescribed order, gaining value in some way at each stage of the chain. It was first described
and popularised by Michael Porter in his 1985 best-seller, Competitive Advantage : Creating
and Sustaining Superior Performance.
5Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
Step 4 : Assess and consolidate results
After quantifying the impact of different standards, the value creation
of standards in each business function is aggregated and calculated
against the profit of the selected company. Important qualitative
impacts of the standards are also included.
2 Introduction to the selected standard
The SS 540:2008 is the Singapore Standard for “ Business Continuity
Management ” that is embraced by both the international and local
businesses operating within Singapore. The project to develop such a
standard was initiated in 2004 by the Economic Development Board
(EDB) in collaboration with the Singapore Business Federation (SBF)
and SPRING. The Business Continuity Management (BCM) Council
led the project with the support of the BCM Technical Committee
which developed the Technical Reference. Launched in September
2005, during an international ISO meeting, the Technical Reference
(TR19:2005) was subsequently reviewed and published as the Singa-
pore Standard for BCM and officially launched on 31 October 2008 3).
BCM aims to safeguard the interests of a company and its key stake-
holders by protecting its critical business functions against prede-
termined disruptions.
The standard defines a holistic management process, identifying
potential threats to an organisation and providing a framework for
building resilience. It also provides the capability for an effective
response to safeguard the interests of its key stakeholders, reputa-
tion, brand and value creating activities 4). Potential disruptions to
3) www.itsc.org.sg/pdf/synthesis09/Four_SS540_2008.pdf
4) SPRING Singapore (2008) : Singapore Standard for Business Continuity Management (SS 540:2008).
6 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
stakeholder interests have to be identified, pre-empted or kept to
the minimum. Business functions supporting value creating activities
have to be identified and processes and resources put in place to
ensure continued operation of these functions in spite of disruptions.
The BCM standard was chosen for this case study as Singapore has
been encouraging organisations to enhance their competence, ca-
pacity, resilience and readiness to respond and recover from events
which threaten to disrupt normal business operations and activities.
The primary objective is to minimise service disruption to customers
and the public in general.
3 Introduction to the selected company
Teckwah was established in 1968 in Singapore as the Teck Wah Seng
Kee Company to produce packaging boxes. Over the years, it evolved
and diversified into a group of companies providing a wide range
of turnkey manufacturing services and products to the industry. The
company has withstood many business and environmental changes
evolving from : a family-owned to a public listed company ; a home-
grown company to a multinational corporation ; and from a packaging
box manufacturer to a solution service provider. Teckwah manages
its global operations from its headquarters in Singapore.
Public listed on SESDAQ in 1994 and upgraded to the mainboard of
Singapore Exchange in May 2003, the company aims to be the pre-
ferred business partner of global companies, creating and delivering
the Best-in-Class Value Chain Solutions worldwide. Today it employs
more than 1,300 staff worldwide and has manufacturing plants in
Singapore, Malaysia, Indonesia, China, Taiwan, Thailand, Japan and
Australia.
7Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
Teckwah has firmly established itself as a company providing cost-
effective customised solutions for its clients. Its suite of services
includes :
• printing and packaging solutions,
• turnkey software manufacturing,
• value chain management,
• service parts logistics, and
• reverse logistics.
4 Attitude of the company towards standardization
Teckwah’s belief in adopting standards relevant to its industry has
shown results in its business growth, hence making it an ideal com-
pany for this case study. One of the key players in the printing and
packaging industry, Teckwah not only uses standards to enhance
efficiency in cost and operations, it also helps to raise the standards
of the industry by encouraging local companies, namely its suppliers,
to also use standards. The company is not simply an operational user
of standards, it also derives strategic advantage from them, seeing
standards as fundamental commercial tools to help gain access to
markets. Standards are part of the company’s daily activities, on which
processes and personnel rely.
Currently, Teckwah has implemented the standards and achieved
the awards as listed below :
• ISO 9001:2008, Quality management systems – Requirements
• Singapore Quality Class – bestowed on organisations having at-
tained business excellence, based on the high standards required
under the Singapore Quality Award framework (SQA).
• ISO 14001:2004, Environmental management systems – Requirements
8 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
• OHSAS 18001:2007, Occupational health and safety management
systems – Requirements
• ISO 28000:2007, Specification for security management systems for
the supply chain
• Singapore Quality Award – the most prestigious award conferred
on organisations in recognition of their attainment of world-class
standards of performance excellence.
• Secure Trade Partnership (STP) Certification – a programme ad-
ministered by Singapore Customs to encourage companies to
adopt robust security measures in their trading operations for
improvement in the security of the global supply chain.
• Singapore Standard SS 540:2008, Business Continuity Manage-
ment (BCM)
• Forest Stewardship Council – Chain-of-custody (FSC-CoC) Certi-
fication – tracing the path of products from forests through the
supply chain, and verifying that FSC-certified material is identified
or kept separate from non-certified material throughout the chain.
• ISO 12647-2:2004, Process control for the production of half-tone
colour separations, proof and production prints – Part 2 : Offset
lithographic processes
Year of certification/award
Latest standards certified/awards achieved Achievements/remarks
1990 ISO 9001:2008 • 1988 – implemented QMS, (then called GMP)• 1989 – certified to ISO 9002• Since 1990 – converted to ISO 9001
1997 Singapore Quality Class First printing company to achieve Singapore Quality Class
2000 ISO 14001:2004 • 1999 – implemented EMS• 2000 – certified to ISO 14001
2002 OHSAS 18001:2007 • 2001 – implemented OHSMS• Since 2002 – certified to OHSAS 18001
9Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
Year of certification/award
Latest standards certified/awards achieved Achievements/remarks
2003 People Developer Awarded by SPRING Singapore
2006 Singapore Quality Award Awarded by SPRING Singapore
2009 Secure Trade Partnership Awarded by Singapore Customs
2009 SS 540:2008 • First company in the private sector certified to SS 540:2008
• 2003 – aligned to SPRING’s Standard on Guidelines for BCM
• 2006 – converted to TR19:2005• Since 2009 – converted to SS 540:2008
2010 FSC-CoC Certified by Det Norske Veritas
2010 ISO 12647-2:2004 Process Standard Offset
Certified by Fogra
2011 Singapore Quality Award Awarded 2nd time
2012 ISO 28000:2007 Certified by TÜV SÜD PSB Pte Ltd
Table 1 : Milestones achieved by Teckwah
Teckwah has documented its practices according to the above stan-
dards in a quality manual known internally as Quality, Environmental,
Safety & Health Management System (QuESHMS).
The company emphasizes the application of management system
standards such as ISO 9001, ISO 14001 and OSHAS 18001 rigorously
in order to institute a systematic management approach, as well
as reduce occupational health, safety and environmental hazards.
This policy allows for a leaner organisation of processes and meets
customer requests for conformity with standards. In addition, the
company uses these standards along with others such as SS 540
for strategic marketing purposes, to create and maintain customer
confidence and overall reputation and to expand its market reach.
10 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
5 Analysis of the value chain
The SS 540 is the only standard assessed for its impacts in this case
study. It is unique in that it is not a process, product or regulatory
standard the impact of which is felt at various stages of the industry
value chain. Rather, it is a standard that allows a given company to
identify critical business functions and events that can cripple those
functions. It also devises means to lower the chance of that happen-
ing or at least draws up a concrete plan on what to do when such an
event occurs so as to minimise business costs. Therefore, this case
study focuses more on the value chain of Teckwah rather than the
industry that Teckwah is part of.
5.1 Company value chain
The general value chain model for manufacturing companies, de-
veloped by Michael Porter was modified to suit Teckwah’s system of
basing production on orders and conducting engineering processes
after the conclusion of sales contracts.
The company’s key value chain components as shown in figure 2, is
described as follows :
1. Management & Administration
Management provides resources to Business Development. The
corporate services include finance, human resources, informa-
tion & communication technology as well as quality system &
facility activities.
2. Information and Communications Technology (ICT)
With the evolution of technology and the networked global
market, ICT has become instrumental in services and is tightly
coupled with the production of goods and functionality of
most major businesses.
11Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
In Teckwah, the ICT department plays an integral role in provid-
ing ICT solutions, infrastructure and support to promote automa-
tion and services to its core business. The role of the ICT depart-
ment is to explore ways of harnessing the potential of ICT to
improve Teckwah services and operations to customers in both
the print and non-print logistics business, as well as new busi-
ness ventures that Teckwah will undertake in the future.
Specifically, the ICT department is guided by the following
objectives :
I. Development and use of reliable ICT solutions and informa-
tion infrastructure to support effective operations and ser-
vices to Teckwah customers, as well as to support internal
administrative functions of Teckwah.
II. Maintain the IT systems and infrastructure in Teckwah to
support continual operations, locally and in the regional
offices.
III. Development and implementation of ICT policies &
strategies.
3. Business Development
The Business Development Teams work closely with the Solu-
tion Center to develop new products and solutions in line with
Teckwah’s business strategy, to meet both customers’ current
and latent requirements.
It also supports the regional Business Development Teams in
attracting new customers as well as increasing business with
existing customers through engagement and excellent sales
service support.
4. Procurement (In-bound Logistics)
The Procurement Department selects the pool of reliable,
qualified and key suppliers for the procurement of equipment,
12 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
parts, materials and services to fulfil on-time delivery and en-
sure Teckwah’s efficient operations.
Procurement, together with the Quality Assurance Department,
also conducts regular assessments of key suppliers, at least
once every two years.
5. Engineering
The Engineering Department comprises the following sections :
I. The Maintenance Section coordinates plans and sched-
ules appropriate maintenance (preventive and corrective)
for equipment used in production and warehousing. The
section also works with the ICT department to resolve all
software related issues occurring during production.
II. The Administration Section maintains the records, manages
availability of essential parts and monitors the performance
of all equipment on a regular basis. It also initiates the
purchase of equipment and services and monitors the work
of suppliers.
The Engineering Department also works with other depart-
ments to :
• review the current factory layout
• recommend improvement to the material flow for better
efficiency
• recommend and implement new cost saving initiatives to
operations
• set-up a production line according to new project
requirements
• coordinate with contractors on all new facility set-ups
6. Production
The Production Department comprises the following sections :
13Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
I. Pre-press section consisting of two teams :
• The Structure Design Team – works closely with cus-
tomers from the early stages of product development
and provides professional input to address packaging
needs. Using cutting-edge computer-aided-design (CAD)
software, the team turns a conceptualisation idea into an
unprinted mock-up sample.
• The Database Management Team – manages customers’
source files for colour separation and desired print layout.
II. Press Section :
Responsible for performing print operations that meet
various colours and finishing requirements for printing and
packaging needs.
III. Print-on-Demand Section :
Equipped with digital on-demand printing capability and
catering for both immediate and short-run personalised
needs.
IV. Pressure Sensitive Adhesive Label Printing Section :
Manages the label printing requirements of mainly key
pharmaceutical customers. Uses flexographic technology to
produce pressure sensitive adhesive labels.
V. Turnkey Software Manufacturing Section :
Converts and/or assembles various types of consigned
items or printed materials into finished goods based on cus-
tomers’ assembly requirements.
VI. Media Control Section :
Manages the incoming secured Intellectual Properties (IP)
information or data, directly or indirectly from customer
source to output components such as CDs or DVDs.
14 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
7. Warehousing & Delivery (Out-bound Logistics)
The key functions of the department are :
I. Receipt of raw materials from suppliers
II. Issuance of raw materials and goods to Production
III. Receipt and storage of finished goods from Production
IV. Shipment and delivery to local and overseas customers
A - Management & Administration
B - information & Communications Technology (ICT)
C - Business Development
D - Procurement(in-bound
logistics)
E - Engineering F - Production G - Warehousing & Delivery
(in-boundlogistics)
Figure 1 : Key value chain components of Teckwah Industrial Corporation Ltd
5.2 Key value drivers
During interviews, Teckwah identified several value drivers that
were key to the success of the company’s core business processes
thereby carving a niche for the company in the Singapore printing
and packaging industry.
They include :
• Quality of products and processes
• Continuous improvement
• Extensive use of Information and Communication Technologies
(ICT) to boost productivity
• In-depth knowledge of the market and always being ahead of
competitors
15Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
• A full spectrum of printing and packaging capabilities
• Extensive partnership with suppliers
• Efficient production
• Extensive distribution channels
6 Scope of the ISO case study
Only the Singapore Standard SS 540:2008 dealing with the implemen-
tation of BCM is considered for the purposes of this study. It focuses
on the key critical functions of Teckwah such that its business can
still be conducted in the event of a disruption. The study also looks at
the business functions associated with the value drivers of Teckwah
and covers the following key business functions :
1. Information and Communication Technology (ICT)
ICT is critical as most of the company’s processes are on Enter-
prise Resource Management systems which, if not functioning,
can delay or shutdown commercial activity.
2. Business development
With many multinational corporations (MNCs) in its client
portfolio, Teckwah is aware of its responsibility in meeting high
standards of corporate governance and conduct. Furthermore,
many of its global clients are dependent on Teckwah for certain
customised services.
Therefore a stable functionality of the company’s operations
is vital for Teckwah to assure uninterrupted and high-quality
services.
Since its BCM inception, customers have reflected an increase
in confidence in the company’s competency. They often use
Teckwah as a benchmark when sourcing for alternative suppli-
ers. In order to strengthen their business supply chains, some
16 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
customers have even stepped forward to align their own busi-
ness continuity plans with those of Teckwah.
3. Procurement
Teckwah periodically tests its supplier’s service support system
and also assesses its supplier’s efficiencies. This yearly prac-
tice fosters and renews strong relationships within the supply
chain, enabling value creation and sustainable win-win conse-
quences.
Procurement is an essential service to Teckwah as it ensures
that equipment, parts, materials and services are always avail-
able to support the continuity of its production activities.
4. Production
Teckwah relies on a smooth and continual production to meet
customers’ requirements and its business objectives.
Teckwah creates synergies by leveraging on its subsidiary
plants facility as alternate production sites. Should produc-
tion at the current premises be shut down owing to a crisis,
the company would be able to continue its operations at an
alternate site. Moreover, Teckwah trains its employees to enable
efficient deployment at an alternate site.
These functions were chosen as part of the scope of this case study
as it is possible to quantify the benefits related to SS 540.
17Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
7 Identifying impacts of standards
The following table indicates the impacts of SS 540 on Teckwah’s
operations.
Selected business function Impact of standard Description of impact
ICT Better continuity of transfer of internal and external operational information
Restore and return to business activities within the shortest possible time after a disruption has occurred.
Business development
Enhanced branding and reputation Customers are more receptive to doing business with companies with sound business continuity measures.
Procurement Availability of raw materials Less likelihood of production delay resulting in less cost incurred.
Production Production staff are BCM ready Production staff are familiar with their roles and responsibilities and are competent in executing the business continuity (BC) plans.
Production Availability of production facilities at alternate sites
Resumption of production operations within the acceptable downtime.
Table 2 : Description of Impacts
8 Selection of operational indicators to measure the impacts of standards
The table maps the selected business functions and describes associ-
ated activities and their value drivers. It also defines the operational
indicators used to measure the impact of SS 540 on Teckwah.
18 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
Selected business functions
Impact of standards Value drivers Operational
indicatorsDefinition of indicators
ICT Better continuity of transfer of internal and external operational information
Extensive use of Information and Communication Technologies to boost productivity
IT infrastructure readiness
Loss of profit due to downtime of IT infrastructure
Availability of records
Cost savings in recovery of lost data
Business Development
Enhanced branding and reputation
• Offers a full spectrum of print and packaging capabilities
• In-depth knowledge of the market and always ahead of competitors
Value of contracts Profit increase in contractual values.
Procurement Availability of raw materials
• Quality of product and processes
• Extensive partnership with suppliers
• Extensive distribution channels
Materials Availability
Availability of raw materials to support production operations at alternate sites to minimise loss of profit due to disruption
Production Production staff are BCM ready
• Quality of product and processes
• Efficient production
Manpower readiness
Adequate manpower for resumption of acceptable production level
Production Availability of production facilities at alternate sites
• Quality of product and processes
• Efficient production
Production facilities availability
Cost savings in recovery of production operations at alternate sitesLoss of profit due to downtime
Table 3 : Operational indicators
19Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
9 Calculation of the economic benefits of standards
The following table indicates the financial impacts of the various op-
erational indicators as defined in the earlier section. In addition, the
impact is reflected in the form of cost savings or increase in revenue,
and calculation of the value of the impact is based on either known
data or an estimation by Teckwah.
Business functions Operational indicators
Financial impacts of SS 540 (SGD) Percentage of total
Financial impact on profits
ICT IT infrastructure readiness $24,000 1.65 %
Business development Value of contracts $1,384,000 95.50 %
Production Production facilities availability
$24,000 1.65 %
Sub Total 1,432,000
Financial impact on cost savings
ICT Availability of records $6,800 0.47 %Procurement Materials availability $1,600 0.11 %Production Manpower readiness $9,000 0.62 %
Sub-total 17,400TOTAL $1,449,400 100.00 %
EBIT, 2011 SGD 13,500,000
Financial impact on profits of SS 540 10.6 %
Note : EBIT – Earning Before Interest & Tax
Table 4 : Economic benefits of implementing SS 540:2008
20 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
9.1 Methodology for calculating operational indicators
The values in Table 4 above were determined from the following
input provided by Teckwah. It was assumed in the study that disrup-
tions would occur only once per year. The disruptions were limited
to denied access to its own facilities due to threats such as fire,
flooding and power outage. It was also assumed that all manpower
were readily available to execute the Business Continuity Plan (BCP).
The calculation is based on available knowledge and experience to
date. Due to the unpredictability of the future, this valuation could
change dramatically in light of future events both in positive terms
(e.g. higher valuation due to proof of effective mitigation of a second
severe disruption) as well as in negative terms due to a failure of the
system to mitigate against drastic and unforeseen events.
• IT Infrastructure readiness
In 2007, an IT connectivity breakdown occurred due to hard-
ware failure that resulted in a 4-day downtime needed for
troubleshooting and replacement of parts.
After BCM implementation, Teckwah estimated that the loss of IT
infrastructure could result in disruption of business transactions
at a profit loss of $24,000 based on 8 % sales revenue of $150,000
per day, over a period of 2 days which is a reduction of 2 days.
The BCM implementation has helped Teckwah to improve its
IT infrastructure and meet the Recovery Time Objectives (RTO).
The creative solution introduced was to relocate its live servers
offsite thus enabling Teckwah to concentrate its IT resources on
recovery operations and meet the RTO.
• Availability of Records
Before implementation of BCM, the data backup was carried
out on a weekly basis. During the actual disruption, 2-days’
worth of data was lost and Teckwah had to mobilise 34 staff
21Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
members for 3 days (outside office hours) to perform re-entry
of the lost data.
Since implementation of BCM, data backup takes place on a
daily basis thereby enabling Teckwah to reduce the recovery
period from 3 days to 1 day. Consequently, the value of this
impact was determined by multiplying the number of staff
members by the estimated daily manpower cost of $100 and
the number of days for re-entry of the data (34 staff members x
$100 per day x 2 days), resulting in cost savings of $6,800.
• Value of contracts
As a BCM certified company, Teckwah meets key customers’
contractual requirements. Existing contracts are renewed an-
nually and new ones secured. The profit from these contracts,
estimated at $1,384,000, is based on 8 % of the annual sales
revenue from key customers.
It is assumed therefore that customers understand the business
risks and the value of the BCM system as a means for identify-
ing and pre-empting future risks and disruptions or, if they
occur, reducing their impact.
• Materials availability
Without BCM, a minimum of 3 days would be required to se-
cure material supplies from the open market.
With BCM, Teckwah’s suppliers are able to deliver one day’s
supply of materials at short notice to support production upon
operation recovery. This saves the company from having to
source for supplies during a disruption on the open market and
pay a premium price. Avoiding a premium price estimated at
8 % of the original price of $20,000 results in a cost saving of
(0.08 x $20k) $1,600.
22 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
• Manpower readiness
Before implementation of BCM, a disruption of denied access
to the building, required 4 days to deploy staff to resume pro-
duction at an alternate site.
After implementation of BCM, staff are operational ready and
the alternate sites are better equipped thereby reducing the
time needed to recover production operations by 2 days. The
resumption of production would require 45 staff members
costing the company an estimated S$100 per employee per
day. The value of this impact was determined by multiplying
the 2-day reduction of downtime by the cost for the 45 em-
ployees, ($100 x 45 x 2days) resulting in cost savings of $9,000.
• Production facilities availability
Before BCM, the alternate site was not adequately set-up to
support the production during a disruption and would require
4 days of preparation.
With BCM, Teckwah is able to resume production at the alter-
nate site within 2 days. The value of the impact was determined
by multiplying the number of days of downtime by the loss of
sales per day in terms of profit at 8 % (8 % x $150,000 x 2 days)
resulting in cost savings of $24,000.
23Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
9.2 Impacts on specific business functions
Table 5 below illustrates the impact of SS 540 on individual business
functions.
Selected Business Functions Total financial impact
ICT $30,800Business Development $1,384,000Procurement $1,600Production $33,000Total Impact of Standard $1,449,400
Table 5 : Summary of impact of standards across different business functions at Teckwah
Table 5, shows that the impact of SS 540 is most felt in Business
Development. Teckwah’s key customers are multinational companies
which expect their suppliers to have sound BC plans to ensure that
critical operations are not drastically affected by disruptions occur-
ring along the supply chain. As such, companies like Teckwah which
have SS 540 in place are better able to secure and renew higher
value contracts.
From Table 4, considering that Teckwah’s profit before tax in 2011
was $13,500,000, the impact on gain in profits of $1,432,000 from the
implementation of SS 540 constitutes 10.6 % of its profit.
10 Qualitative and semi-quantitative considerations
Other intangible benefits arising from the implementation of the SS 540
which were difficult to quantify in terms of financial gains includes :
• Ability to manage its risks efficiently and effectively through bet-
ter understanding of their business and improved ’risk-intelligent’
decision strategies.
24 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
• Enhanced morale and confidence among employees following
communication of the BCM measures throughout the company.
Owing to staff readiness for BC during disruptions, adverse impacts
on the company are minimized.
• Improved branding and reputation of the company enhances its
competitive edge over other players who are still deliberating the
value of BCM certification.
11 Evaluation of the results
The estimated impact of 10.6 % or $1,432,000 over a year against
Teckwah’s profit on the use of SS 540 shows that the standard is an
important element of Teckwah’s business strategy. SS 540 has helped
Teckwah to increase revenue as well as to be prepared in advance
for any disruptions that might cripple its operations.
Indicators Financial impacts occur in case of
IT infrastructure readiness Disruption
Availability of records Disruption
Value of contracts Regular operations
Materials availability Regular operations
Manpower readiness Disruption
Production facilities availability Disruption
Table 6 : Relationship between operational indicators & financial impacts
Table 6 shows that financial impacts do not occur only in the case
of disruptions. On the contrary, the key impact of SS 540, the “ value
of contracts ”, which makes up nearly 96 % of the total impact, oc-
curs during regular operations. Therefore, the implementation of a
system assures customers of the company’s readiness to handle any
unexpected disruption or disaster.
25Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
Teckwah is a major player in the printing and packaging industry and
an emerging player in the logistics industry. In this respect, Teckwah is
well placed in encouraging the adoption of standards amongst its peers
to improve productivity and efficiency in the running of the business.
Certain benefits in the case study are non-quantifiable, owing to lack
of available data. From past BCM case studies, it has been noted that
companies with BCM capabilities in place tend to enjoy lower insur-
ance premiums over the years. As such, it is possible that Teckwah
could similarly derive additional cost savings. Therefore, the total
figure does not reflect the full benefits to the company.
Return on investment
The basic assumption applied in this assessment was that one incident
occurs per year disrupting the business functions of ICT & produc-
tion. The scale of the impact is based on an actual disruption of the
operations of Teckwah that occurred in 2007. Evidently, the financial
impacts depend on the size of the disruption used as a baseline,
however, this selection appears justifiable as it represents the most
likely and frequent type of disruption in Teckwah’s industry.
1. Financial impact on Profits gained from BCM implementation is
$1,432,000
2. Total investment cost for the 1st year = (i)$101,950 + (ii)$59,520
+ (iii)$71,400 = $232,870
I. 1st year BCM implementation cost (manpower, consultancy,
training & certification costs) = $101,950
II. Annual cost for maintaining the Emergency Operations
Centre is $4,960 x 12 Months = $59,520
III. Annual rental cost for hosting Teckwah’s servers at a data
centre is $5,950 x 12 Months = $71,400
The return on investment on the implementation of BCM for the
1st year = A/B = $1,432,000/$232,870 = 614.94 %
26 Economic benefits of standards Singapore – Teckwah Industrial Corporation Ltd
12 Conclusion
The ISO case study has shown that, together with the other standards,
Teckwah benefited from the implementation of BCM as a strategic
management programme ensuring competitiveness and continuity
of its business functions should disruptions occur.
Teckwah understands that the study is reflective of current experience
and knowledge, but its results are also open to being put into doubt
by whatever the future may have in store. Therefore, common sense
would require that the security of business operations be reviewed
taking into account possible unlikely events with a view to continu-
ously improving business resilience.
Teckwah has achieved a broad overview of the quantitative and
qualitative benefits of implementing SS 540, with a derived estimate
of 10.6 % increase in its annual profit before tax.
As this case study demonstrates, the dedicated effort by Teckwah
in actively adopting the relevant standards is justified through the
benefits of standards in enhancing its value drivers and achieving
numerous corporate milestones.
This study also shows that Teckwah’s partnerships with its suppliers
and customers have benefited from improved operational efficiencies,
enhanced corporate reputation and a more resilient supply chain
from the implementation of SS 540.
With the publication of ISO 22301 in May 2012, Teckwah’s manage-
ment has initiated alignment of its BCM framework to the International
Standard on BCM, ISO 22301, so as to exceed its customer’s expecta-
tions, enhance its global recognition and increase its market access.